Pleaded Guilty Under Seal to a Conspiracy to Extort Public Officials in Connection with Development Projects and to Income Tax Evasion

GREENBELT, Md. (July 20, 2011)—The guilty plea of retired Prince Georges County Fire Department official Karl Granzow, age 46, of Upper Marlboro, Maryland, was unsealed July 18. Granzow pleaded guilty under seal on March 30, 2011, to conspiring to commit extortion and to income tax evasion.

The unsealing of the guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation; and Acting Special Agent in Charge Jeannine A. Hammett of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.

Citizens have a right to expect government officials to make decisions based on the public good rather than their personal interests, said U.S. Attorney Rod J. Rosenstein. For more than a decade, these defendants conspired to influence Prince Georges County government through a variety of corrupt schemes that had one thing in common: providing undisclosed personal benefits to government officials.

According to his guilty plea, Granzow was an official with the County Fire Department, responsible for the Management Services Command. Granzow and other co-conspirators, including developers Daniel I. Colton and Patrick Ricker, had ownership interests in Greenbelt Metropark, which sought to design, develop and build a mixed-use project near the Greenbelt Metro Station, called Greenbelt Station.

From 1997 through September 11, 2008, Granzow, Colton, Ricker and others offered things of value, including money, trip expenses, meals, drinks, hotel rooms, airline tickets, rounds of golf, employment, mortgage payments, and monetary and in-kind campaign contributions to state and local government officials.

In exchange for the bribes, state and local officials performed and agreed to perform favorable official actions for Granzow, Colton, Ricker and their co-conspirators and their companies. The official acts included obtaining approval letters for the Greenbelt Station Detailed Site Plan; providing the conspirators with non-public County information; obtaining necessary state and local approvals for the development of Greenbelt Metropark; voting in favor of legislation favorable to their development projects; creating the Greenbelt Station Special Taxing District and the Greenbelt State Development District; ensuring that Greenbelt Station was listed as priority number five under the State Highway Administration list of project/construction priorities; and, ensuring that a certain developer would obtain a contract to purchase certain buildings for the County.

State and local officials concealed items they received from Granzow and his co-conspirators by failing to report them or by misrepresenting their nature and value. Further, Granzow and his co-conspirators concealed campaign contributions to the state and local officials that were above state and federal legal limits by using conduits and in-kind contributions. Specifically, Granzow and his co-conspirators recruited straw donors, including family members and employees, to make state and federal campaign contributions with funds provided by or reimbursed by Granzow and his co-conspirators. Granzow and his co-conspirators also provided in-kind contributions to conceal the actual amount of their campaign contributions, such as campaign signs, food, alcohol and the administrative services of their employees and family members.

During the course of the scheme, including illicit campaign contributions and property provided by Granzow and his co-conspirators, the value of things obtained by public officials and others acting with a public official attributable to Granzow is between $30,000 and $70,000.

Additionally, Granzow prepared or caused to be prepared a federal income tax return for the calendar year 2004 which failed to report $225,974 in taxable income, resulting in a tax loss of $74,191.

Granzow faces a maximum sentence of five years in prison for each of the offenses. No sentencing date has yet been scheduled.

Daniel Colton, age 61, a resident of Annapolis, Maryland and Raleigh, North Carolina, pleaded guilty under seal to conspiracy to commit extortion and to making false statements to the Federal Election Commission. His guilty plea was unsealed on June 2, 2011 and he faces a maximum penalty of five years on each of those counts. Co-conspirator Patrick Q. Ricker, age 52, of Bowie, Maryland, pleaded guilty on December 30, 2009 to conspiring to commit honest services fraud and to make false statements to the Federal Election Commission; and to tax evasion. His plea was also entered under seal and was unsealed on May 17, 2011. Ricker faces a maximum sentence of five years in prison on each of those counts. No sentencing dates have been scheduled for Daniel Colton and Patrick Ricker.

United States Attorney Rod J. Rosenstein praised the FBI and IRS-CI for their work in the investigation and thanked the Prince Georges County Police Department for its assistance. Mr. Rosenstein thanked Assistant United States Attorneys James A. Crowell IV, A. David Copperthite and Sujit Raman, who are prosecuting these cases.